Allegations reported in The Chronicle that a charter school based in Fresno with statewide campuses hired convicted felons, falsified enrollment data and taught religion on taxpayer funds are prompting calls for reform in the four-person race to become California's next superintendent of public instruction.

Although their solutions differ, three of the candidates in the March primary agree that when independent public schools known as charter schools first came on the scene in 1992, they were not expected to proliferate willy- nilly with satellite campuses hundreds of miles away from the school district that granted them a contract to operate.

"Oversight, in that kind of situation, is very difficult, and we need to think of a new way to foster better communication," said candidate Lynne Leach,

Shortly after Gateway opened its first school in Fresno in 2000, it began secretly opening more campuses in Oakland, Sunnyvale and Southern California and collecting the $4,600 per student offered by the state.

"They never told us what they were doing, and we'd find out about campuses through word of mouth," said Fresno spokeswoman Jill Marmolejo.

"We found out about the Institute of Human Excellence operating in an Oakland city recreation center because someone from the mayor's office called to ask what was going on," she said.

That satellite school later lost its lease and closed.

Although Gateway's lawyers have portrayed the scrutiny as "post-Sept. 11 anti-Muslim sentiment," the Fresno school board cited the charter school's $1. 3 million debt when revoking the charter, as well as the lack of background checks for more than half its teachers and the fact that two convicted felons were working with children in Oakland.

In hopes of preventing future Gateways, candidates to fill Delaine Eastin's chair as state schools chief are proposing solutions -- ideas they will push if elected or not.

Sen. Jack O'Connell, D-San Luis Obispo, wants charter law changed so that charter schools must receive state permission to open far-flung satellite campuses.

"Clearly, if local school districts cannot do the oversight because the satellite schools are hundreds of miles away, then the state has to step in," he said. "The state has a fiduciary responsibility to taxpayers and to school children."

O'Connell has already successfully changed a different aspect of charter school law so that home-study charter schools -- where parents teach their own children -- must prove they are really doing the work to collect state money. That law, signed last fall, was in response to a Chronicle investigation that revealed a home school outfit in Knightsen was keeping nearly 40 percent of state financing as management fees.

Leach doesn't favor state intervention, saying permission requirements would stifle the innovation inherent in grassroots charter schools. Instead, she prefers a new system of checks and balances, that would make county superintendents the watchdogs of satellite charter schools. They could then report back to the school district that granted the original charter.

"That way, the county superintendent could do the inspections and be in regular contact with the school district where the charter school comes from," she said.

Katherine Smith, a candidate for state schools chief and president of the Anaheim Union High School District, said she has just begun thinking about the issue and hasn't decided on the best approach. She wants to keep the solution local.

"I hate to form more bureaucracy, because we are fraught with it, but something obviously has to be done," she said. "Maybe local districts could help monitor the satellites that open in their areas."

The fourth candidate, political consultant Joe Taylor of Los Angeles, could not be reached.